G.R. No. 228262 - People vs. Molde

Parties and transaction
On October 3 and 9, 1978, Associated Banking Corporation (now United Overseas Bank Philippines) extended two loans to Antonio Ang Eng Liong as principal debtor and to his brother Tomas Ang as co-maker by promissory notes PN-No. DVO-78-382 (₱50,000 due January 31, 1979) and PN-No. DVO-78-390 (₱30,000 due December 8, 1978).
Subsequent amendments and disclosure statements provided for a 14% per annum interest rate, 2% service charge, 1% penalty charge per month on overdue balances, and attorney’s fees of 20% of the outstanding obligation.

Collection suit and defenses
On August 28, 1990, the bank filed suit in RTC Davao City for collection of ₱539,638.96 (as of July 31, 1990), itemized into principal, accumulated interest, service and penalty charges.
Antonio admitted the ₱80,000 loan but challenged computation and claimed excessive charges; Tomas denied receiving value, asserted he was an accommodation maker, raised defenses under the Negotiable Instruments Law (NIL) and Usury Law, and counterclaimed and cross-claimed for attorney’s fees, damages, and reimbursement.

Procedural history
Antonio was declared in default; an ex parte hearing led to a February 21, 1991 decision ordering him to pay principal, interest, service charges, reduced penalties, attorney’s fees and costs; writ of execution issued April 5, 1991.
Tomas moved to dismiss for lack of jurisdiction; CA annulled the default judgment against Antonio and remanded for trial solely against Tomas. Antonio again defaulted; Tomas’s motions for documents were denied.
Tomas presented evidence of the bank’s transfer of non-performing assets to the Asset Privatization Trust (APT) and of the bank’s buy-back in October 1993. The RTC dismissed the complaint on January 5, 1996 for lack of cause, holding the bank was not holder of the notes.
On October 9, 2000, the Court of Appeals reversed, ruling the bank was holder and that Tomas was liable as accommodation party for principal plus 14% interest; penalties and fees not expressly in the notes were dismissed. Motion for reconsideration denied December 26, 2000.
Tomas filed a Rule 45 petition before the Supreme Court raising issues on holder status, suretyship discharge (Art. 2080 CC), jurisdiction (filing fees, prescription), CA’s power to assign errors, and various defenses (extensions, incomplete instruments).

Real party in interest and holder status
Was Associated Bank the holder of the promissory notes at the time of filing?
Did the transfer to and subsequent buy-back from the Asset Privatization Trust affect the bank’s standing?

Suretyship and discharge
Does Article 2080, Civil Code, release Tomas Ang as accommodation maker for failure to serve notice of appeal on Antonio Ang Eng Liong?
Are the rules on principal and surety (Arts. 1207–1222 CC) applicable to Tomas’s liability?

Procedural and appellate questions
Did the RTC acquire jurisdiction given alleged deficient docket fees and prescription?
Did the CA err in assigning errors not originally raised by the parties?